Thursday’s Selloff, By the Numbers

Now this is what a selloff looks like.

Stocks snapped a five-month winning streak amid a steep drop that was ugly no matter how you sliced it.

Argentina’s default and geopolitical turmoil in Ukraine and the Middle East weighed on the markets Thursday, as didconcerns about the Federal Reserve potentially pulling back on its accommodative policies sooner than expected. Some even cited end-of-month window dressing as another catalyst, with investors booking profits and pushing the market even lower.

As the dust settled, investors were faced with one of the worst days of the year for stocks.

Here’s a look at the toll the selloff took on investors:

• 317 points: The Dow Jones Industrial Average dropped 317 points, or 1.9%, to 16563, its steepest drop since February and second-worst day of the year. The blue-chip index fell 326 points on Feb. 3, a day that marked a near-term bottom following an early-year selloff.

• 30 blue-chip stocks: All 30 Dow components finished the day in the red, led lower by Exxon Mobil Corp., American Express Co. and Nike Inc., which all fell by more than 3% apiece. Coca-Cola Co. held up the best among Dow components, dropping less than 1%.

• 1% days: The Dow’s streak of consecutive days without a 1% move is over. The Dow last moved 1% in either direction on May 15, when it fell 1.01%. Through Wednesday’s close, that represented a streak of 52 consecutive trading days, the longest such stretch since November 2006 through February 2007. Back then, the blue-chip average went 60 trading days without closing up or down 1%. Over the past 50 years, this year’s streak was the seventh longest on record.

• 2% moves: The S&P 500 dropped 2% to 1930, its third-worst day of the year. The index dropped by more than 2% only two other times in 2014 — Feb. 3 and April 10. The tech-heavy Nasdaq Composite fell 2.1% to 4369, its second-worst day of 2014. On April 10 it fell 3.1% amid a big drop in many of the market’s so-called momentum stocks.

• 28%: The CBOE’s Volatility Index, the VIX, jumped 28% to 17.09, its highest level since April, as options traders rushed for protective positions. The VIX has a long-run average of around 20. Excluding a brief period in early February, it has been below 20 all year long. 

 Thursday’s gain came two weeks after it surged 32% on the day that a Malaysia Airlines plane was shot down and Israel sent troops into Gaza. That marked the VIX’s biggest one-day gain in 15 months and only the 22nd time since 1990 that it surged more than 30% in a single day.
The question now: Buy the dip, or sit on the sidelines? Will investors use this drop as a buying opportunity, as they have repeatedly throughout this bull market? Or is this finally the beginning of the long-awaited, highly anticipated pullback in the stock market?

http://blogs.wsj.com/moneybeat/2014/07/31/thursdays-selloff-by-the-numbers-2/